Budget: Negotiating Drug Costs; Food Safety; Antibiotic Resistance

President's budget aims to deliver on State of the Union promises.

MedpageToday

by Shannon Firth, Contributing Writer
February 02, 2015

WASHINGTON -- President Obama released his $3.99 trillion 2016 budget on Monday -- a plan that includes a proposal to give the administration the authority to negotiate lower prices for drugs covered by Medicare Part D.

That proposal, like much of the budget, is likely to be a hard-sell in the Republican-controlled Congress that often prefers market solutions. But criticism of Part D as an unfunded benefit has come from both sides of the aisle, which may give it some traction.

Streamlining Food Safety

Also included in the budget is a plan to streamline and consolidate federal oversight of food safety, now overseen by the FDA and the Department of Agriculture, into a single federal food safety agency.

In a press call on Monday, Michael Taylor, JD , deputy commissioner for Foods and Veterinary Medicine acknowledged that the food safety system was "fragmented."

But he neither pledged to support or refute the president's plan. "It kind of depends on how it's done," he said.

Overall, Obama's budget aims to deliver on the promise he made in the State of the Union address to strengthen the middle class now that the "shadow of the [economic] crisis has passed."

Speaking Monday at the Department of Homeland Security, Obama noted that having survived the Great Recession, the nation is now witnessing rising wages and job growth at a pace not seen since the 1990s. Such a positive economic atmosphere brings new opportunities and begs an important question, he said:

"Will we accept an economy where only a few of us do spectacularly well, or are we going to build an economy where everyone who works hard has a chance to get ahead?"

Approximately $83.8 billion in discretionary spending has been earmarked for the Department of Health and Human Services. This is an increase of $4.8 billion from the 2015 budget, according to a budget brief released Monday by the Health and Human Services Department.

Sylvia the Secretary of the HHS, said "This investment will allow our department to deliver impact today and lay a strong foundation for tomorrow."

CMS Investments

The budget estimate for the Centers for Medicaid & Medicare Services (CMS) is $970.8 billion, $74 billion more than the 2015 fiscal year level. Those dollars would finance Medicare, Medicaid, the Children's Health Insurance Program -- which was slated to expire in 2015 -- and private health insurance programs. It would also fund "program integrity efforts" and help advance CMS' role in implementing the the Affordable Care Act.

The president's proposed budget also includes $4.9 billion -- including $277 in user fees -- for the Food and Drug Administration (FDA), which is $425 million, or 9% more than fiscal year 2015.

A total of $29 million is earmarked for an overhaul to create a "more modern FDA," according to an FDA press release.

The National Institutes of Health would be granted $31.3 billion in 2016 under the proposed budget. This represents a $1 billion increase over the 2015 budget. The agency plans to offer 35,447 research project grants and over 10,000 awards.

Other items of interest in the White House budget:

$185 million -- which represents an increase of $58 million -- to CDC and the Substance Abuse and Mental Health Services Administration (SAMHSA) for the President's "Now is the Time" initiative, ensuring that students and young adults receive treatment for mental health problems.

Accelerate research to fight bacteria-resistant antibiotics with $993 million of funding, which across HHS, represents a $491 million increase. The money would support research, development, and clinical trials "to ensure the continued availability of effective therapeutics for the treatment of bacterial infections.

The Infectious Disease Society of America said it supports the president's plan to double federal funding to fight antibiotic resistance with an additional $1.2 billion in funding to the NIH and Biomedical Advanced Research and Development Authority (BARDA) which would "revitalize the pipeline for new antibiotics and diagnostics."

IDSA noted, in a press release, that it wished the president had gone even further and supported the Promise for Antibiotics and Therapeutics for Health (PATH) Act and the Antibiotic Development to Advance Patient Treatment (ADAPT) Act, bills that would help patients obtain quicker access to badly needed antibiotic treatments and enable tax credits to entice research and development.

Mary Woolley, president and CEO of Research!America, in a press release, said the organization was pleased by the president's call to end sequestration and the push to accelerate medical progress. She also lobbied for even more medical research funding.

"We see this as the starting point. It is absolutely important to invest in initiatives that focus on precision medicine, Alzheimer's, antimicrobial resistance, and other growing health threats, but these investments should supplement, not supplant the imperative of making up for a decade's worth of lost ground."

Woolley pitched the Accelerating Biomedical Research Act, as an example of a funding opportunity for more research.

"Medical progress is not just a health imperative, it is a strategic imperative, integral to national security, fiscal stability, and economic progress," she said.

Elizabeth Carpenter, the director in health reform practice at Avalere Health, said she was struck by the balance Obama tried to strike between innovation and cost consciousness.

"You see the president himself kind of committing to research and development and innovative therapies and at the same time acknowledging that there is debate over the cost of some of those therapies."

Regarding the viability of the proposed budget, Carpenter said, "From a health perspective, things like extending funding for [Children's Health Insurance Plan] , repealing and replacing the [sustainable growth rate] and the move towards value based care, I think those are all things that are capable of achieving bipartisan support in Congress."

However, money saving proposals, such as reforms to the tax code and any provider cuts, have historically been controversial, "which is why they have yet to be used to fund any range of healthcare legislation over the past few years," Carpenter added.

In terms of deficit reduction, the administration claims that targeted reforms to Medicare and Medicaid will save more than $10 billion over the next 10 years.

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